Though the Jim Henson Company has been typically geared at releasing kid-friendly entertainment over the years with movies like Labyrinth and The Muppet Movie, the upcoming The Happytime Murders is being released by one of the studio's sister companies Henson Alternative, which is aimed at producing entertainment for an older audience. In the movie, Melissa McCarthy plays a detective tasked with solving a string of murders aimed at the Muppet cast members of a popular '80s television show called The Happytime Gang. Reunited with her Muppet partner Phil Phillips (voiced by Bill Barretta), the two explore a seedy underbelly of crime and corruption in order to solve the case. However, after the first official trailer for The Happytime Murders was released, Sesame Workshopfiled a lawsuit against the movie due to alleged copyright infringement, and Happytime producers STX Entertainment responded by using a Muppet lawyer named Fred, Esq. to handle the proceedings.

In the Happytime Murders trailer, the official tagline is revealed as "No Sesame, All Street," which Sesame Workshop deemed as deliberate copyright infringement. As an official response to the lawsuit, STX Entertainment released a statement from the puppet lawyer via HuffPost. The statement expresses enthusiasm regarding the positive reaction the trailer received from audiences, but also takes aim at Sesame Street, stating that they are "disappointed" that they do "not share in the fun." At the end of the brief statement, Fred, Esq. explains that the studio is wholly confident in their legal position.

The Sesame Workshop suit claims that STX Entertainment deliberately used the Sesame Street brandto help promote The Happytime Murders, adding that the reference has confused viewers into believing that the two properties are related. They stated that having gained the trust of children and their parents for nearly 50 years, the tagline risks the “threat of irreparable injury posed to Sesame’s mark and brand.” Still, STX Entertainment is standing their ground, confident that the inclusion of the tagline is legally sound.

Though the movie's director Brian Henson (son of the studio's late founder Jim Henson) is known for movies typically aimed at a younger audience, like The Muppet Christmas Carol and Muppet Treasure Island, and even sitcoms like Dinosaurs and Muppets Tonight, he's no stranger to releasing material that is decidedly more mature. He's worked on the TV miniseries Nightmares and Dreamscapes: From the Stories of Stephen King, as well as the science fiction series Farscape. And though he hasn't quite reached the sort of subject material included in The Happytime Murders before, he's proven himself to not be solely affiliated with children's entertainment.